Towards industrialization powered by renewable energy

The Climate Change Commission (CCC) conducted a public consultation on its proposed Energy Policy Review Inception Report last November 22, 2016. The review adheres to the envisioned low-carbon development pathway and accounts for the national goals and targets for climate change adaptation and mitigation, disaster risk reduction, and sustainable development.

The report, aptly titled “Paving the Way to a Clean Energy Future”, gives considerable attention to the technological changes driving the energy sector.

“(W)e have recently seen an international paradigm shift in modern energy sectors which is starting to significantly change the purpose and design of national energy systems. This change is driven by the availability of new decentralized power generation units based on renewable energy (most notably PV and wind), energy investment patterns that rapidly shift from public to private investments, new business models made possible through new energy and information technologies, and radical price dynamics including the recent stagnation of coal and gas prices as well as the decrease of renewable energy technologies prices that will bring them well into the electricity ‘price parity’ range for many market segments over the next years.”

Coal plant advocates will certainly argue that renewable energy (RE) is too costly, unreliable and difficult to integrate into the power grid.

But the claim that RE is expensive is a myth.

In the Philippines, the cost per MW of solar has dropped by 80% and wind by almost 50% since 2010. Last month, Meralco announced that they were able to get proposals as low as P5.39 per kWh from two solar developers. Another supplier reportedly offered a lower price of Php 4.69 per kWh. Worldwide, the decline in prices are even more pronounced. In Chile, solar power was sold at $29.10 per megawatt hour (MWh) at an energy auction in August 2016, which is half the price of coal. Bids in recent auctions in the Middle East were even lower.

The costs of technology-based resources usually decline over the long term, while the costs of depletable natural resources inevitably increase.

Another RE myth is intermittency, which is oftentimes equated to unreliability.

Most advanced countries are shifting from centralized to distributed generation, as the shift will result to more flexible and robust power systems with lower transmission and distribution costs. The base load concept utilizing large power plants is now considered outdated in countries such as Germany and Australia.

Consistent with the goal of keeping global warming temperature below 2 degree Centigrade, many signatories to the Paris Agreement are targeting 100% RE supply in 25 to 30 years. For example, The Energy and Resources Institute (TERI) in New Delhi has forecasted that India may be in a position to end coal-fired power by 2050. But in Portugal the future has already arrived. In May 2016, the country managed to run for four and a half days on renewable electricity alone.

Can the Philippines be like Portugal or other countries aiming for 100% renewables?

Yes, we can.

In 1999, RE’s share in the country’s power mix reached a high of 44% due to hydro and geothermal supply. The RE share can be restored to the target levels set for 2030 and beyond by implementing the policies and mechanisms in the RE Act.

We have better RE resources than most of these industrialized countries. The goals to improve energy self-reliance, reduce the country’s dependence on imported fossil fuels, increase the utilization of RE resources, and reduce harmful emissions are very clearly stated in the RE Act. The mechanisms and incentives needed to accelerate the exploration and development of RE resources are also contained in the law.

So what needs to be done?

We must face the fact that we really have no choice but to develop and rely on our own indigenous resources. Our continued reliance on imported fuels is a form of vassalage.

We must set clear policies and implement concrete programs to move away from centralized to distributed generation, in order to take advantage of the advances in RE, smart grids and storage technologies and avoid being dependent on obsolete and dirty technologies for decades.

As one of the most vulnerable country to climate change and extreme weather events, we should blaze the path to sustainable development and take the lead in preserving the earth for succeeding generations.

Atty. Pete H. Maniego is the former chair of the National Renewable Energy Board and currently senior policy advisor of the Institute for Climate and Sustainable Cities.

References:

Climate Change Commission Resolution No. 2016-001, “Resolution on the Development of a Clear Policy on Coal-Fired Power Plants in Pursuit of a Low Carbon Development Pathway for the Philippines”, 16 May 2016

Climate Change Commission, “Paving the Way to a Clean Energy Future”. November 2016: p. 3